Peers Move To Strengthen New Regime For Digital Markets
12 March 2024
Digital Markets, Competition and Consumers Bill Briefing
To find out the NMA's position on the Bill, download our briefing document
High-quality independent journalism informs and engages the public, debunks misinformation, brings together communities, and holds the powerful to account. As the biggest investors in journalism in the UK, news media publishers are the powerhouses for journalistic content, often setting the news agenda for others follow, providing a significant contribution to our democratic society.
Yet, although the explosion of digital has enabled news media titles to take their journalism to more people than ever before, publishers have to date been unable to realise the fair commercial value of their content online. Multiple studies including the Cairncross report and the Competition and Market Authority’s review of the online advertising marketplace have stated unequivocally that the stranglehold the tech platforms have on online advertising is causing publishers to miss out on their fair share of revenues.
Google and Facebook could be reaping up to £1 billion in value annually from news publisher content which appears on their platforms, yet only a fraction of that flows back into the industry which invests in journalists and their journalism. A study from a leading academic estimated the value tech platforms’ create for news outlets as “disingenous”, with Google returning less than £75 million a year to publishers. This structural imbalance is placing the business model of news publishers, particularly local news publishers, under enormous strain, which in turn damages journalism in this country.
Current Situation
"The market dominance of the online space by the big tech giants has a real impact on consumers, audiences and existing and new businesses looking to grow and innovate."
Baroness Tina Stowell, chair of the House of Lords Communications and Digital Committee
For years, news publishers have operated in this highly dysfunctional market which has precluded them from realising the fair returns for their content. Despite this, the industry has proved to be remarkably resilient with relatively few title closures in recent years, considering the severe headwinds faced by the industry. The government has recognised this imbalance and set up a Digital Markets Unit, within the CMA, with a remit to tackle the structural problems caused by the tech platforms and bring about real reform to promote genuine competition.
One of the weapons in the DMU’s armoury will be the news media bargaining code which will recast the relationship between news publishers and the platforms by ensuring that the platforms are compelled to negotiate in good faith for use of news publisher content. This will be modelled on a similar scheme in Australia which has proved to be successful in driving more meaningful deals between platforms and publishers.
Yet, the Digital Markets Unit does not have the teeth it needs to get the job done. In April 2023, the government published the Digital Markets, Competition and Consumers Bill, currently in its final stages. It is imperative that the Bill is not watered down as it makes progress through Parliament, in order for it to deliver benefits for news publishers and consumers alike. Further delay will be extremely damaging to the industry which, like many businesses from different sectors, faces a difficult year ahead in challenging economic conditions.
The NMA welcomed the DCMS Committee’s recommendation in their report on the Sustainability of Local Journalism for government to lay out “clear and explicit provisions” for smaller local publishers to be remunerated fairly under the pro-competition regime in the Digital Markets, Competition and Consumers Bill.
The NMA published a mythbusting paper analysing concerns that have been expressed about the legislation. The current plans will give the CMA the tools to tackle entrenched market power in the digital economy, where a small number of dominant tech giants abuse power to their own advantage – at the expense of consumers and businesses. Preserving the Judicial Review appeals standard is essential to ensure the system works effectively – any change to the Judicial Review standard risks leaving the regulator toothless.
What action do we want to see?
The Bill is urgently needed. The NMA is campaigning vociferously for the legislation to give the DMU the powers it needs.
The NMA has also created a workable framework for a draft bargaining code through the medium of current legislation which can then be readily subsumed into the new regulatory regime for digital gatekeepers administered by the DMU, when legislation to empower the DMU is finally passed. Implementing the bargaining code will also allow the government to stay true to its promise of ensuring the “UK’s media and press sectors are able to flourish online.”
